Inquirer Editorial: Two economies

Many big businesses, Wall Street, and wealthy individuals have rebounded from the Great Recession. But many in the middle class and the working poor have yet to feel the effects of the economic recovery.

If anything, the tale of two economies is creating a country with a wider divide between the lower, middle and the upper classes.

That is helping to fuel increased class warfare, and helps explain the fear and anger expressed by many voters against incumbents in the November election. That anger may be further exacerbated as gas and food prices rise, and state and local governments confront potential tax hikes in budgets this year to offset the loss of federal stimulus dollars.

To be sure, the economy is recovering from the deep meltdown in 2008. The stock market bounced back last year. Investment banks reaped fat profits and will soon dole out handsome bonuses to workers. Even troubled companies, like General Motors and AIG, are growing again.

But across the country, many in the middle and working class continue to get squeezed. Unemployment remains high. For many who have a job, income remains flat.

Meanwhile, prices and taxes are going up. And home prices continue to fall. About 10 percent - roughly 5 million homes with mortgages - have gone into foreclosure the last four years. Another 4 million people are in danger of losing their homes.

New Census Bureau data shows a sharp increase in the number of multifamily households the last two years, as struggling family members move in together to try to make ends meet.

Until more is done to ease the housing crisis, create jobs, and balance income inequality, there will be no recovery for many in 2011 or beyond.